A n audit released by the New York State Comptrollers Office describes the financial condition of the village’s water and sewer funds as precarious.

Auditors found that water and sewer rates were unable to cover operating expenses and that the village couldn’t account for more than half of the water it processes, costing the village tens of thousands of dollars per year.

Mayor Peter Telisky said the village agrees with the findings and has taken steps to address some of the concerns.

“It’s something we are working diligently on,” he said.

The overall problem may be the age and condition of the water and sewer systems, and the community’s limited ability to pay for repairs.

The report, which was released last week, examined the financial condition of the village’s water and sewer funds and assessed its water accountability for the period of June 1, 2008, to May 31, 2011.

Auditors found that water and sewer rates were not sufficient enough to cover operating costs.

Although the board increased water rates, and metered water sales increased approximately 17 percent each year from 2008 to 2011, the water fund ran in the red three of those four years and the only year it didn’t, 2010, was because of additional revenue generated by the sale of timber.

Expenses in the water fund have increased over the last several years. In 2005, the state mandated that Whitehall build a water filtration plant because the previous facility wasn’t compliant with the clean water act.

The new plant, which came on line in 2007, is more expensive to operate than the previous plant, and the cost of chemicals used to treat water has also increased.

In the 2007-08 fiscal year, water fund expenses were $263,465, but they jumped to $333,273 in the 2008-09 fiscal year, and topped out at $414,471 last year. And those costs are on top of mandated repairs to the water and sewer system.

In order to bridge the annual deficits, village officials loaned $717,303 over three years from the general, capital project, and community development funds to the water and sewer funds. And while that practice is permissible, auditors said it could impair the financial condition of the general fund.

The report recommended the village establish user rates that provide enough revenue to cover operating costs. It took a step in that direction last month when it announced water rates were tentatively slated to increase 10 percent.

Water missing

The village reported that paid to process 277 million gallons of water and billed customers for 75 million gallons, meaning 73 percent, or nearly 202 million gallons was unaccounted for. After factoring in unmetered activities such as firefighting and hydrant flushing, the village still could not account for at least 148 million gallons, or 55 percent of the water it processed in 2010, substantially higher than the industry standard of 10 percent. It’s estimated that the cost to process and distribute that water was between $97,000 (based on 55 percent loss) and $129,000 (based on a 73 percent loss).

In 2004 and again in 2008, the village hired outside consultants, at a price of $5,550 to $9,000, to perform leak detection surveys. The surveys were supposed to determine where the water was being lost and although several leaks were identified, the amount of unaccounted for water has continued to increase despite those leaks having been repaired.

Another survey is expected to be conducted later this year.

Officials know that some water is lost through the intentional bleeding of pipes which is done to decrease sediment build-up at places where water lines dead-end.

The village is hoping an electric flow meter and timer that are used to bleed a line will provide a more accurate estimate of water that is lost though bleed off. If it does, additional timers will be installed at other points in the system.

Village officials believe that some of the water loss could be attributed to theft.

The village has purchased a mobile water meter that will allow the Department of Public Works to determine flow rates in specific areas, which can then be compared to water meter readings. If the numbers don’t make sense, the village should be able to at least narrow down areas where water appears to be disappearing.

One of the difficulties of pinpointing where water is being lost is due to the fact that the system is nearly 100 years old.

Pipes unaccounted for

Besides being outdated, the system has undergone additions and changes over the course of the last century, some of which have gone undocumented. Telisky said village crews sometimes find pipes in places they didn’t expect.

“In some areas we have no evidence of where the pipe is,” Telisky said.

The village has completed several pipe replacement projects, including the installation of a new 10-inch main along Broadway that was completed last fall, and have additional repair projects planned later this year.

But given the village’s overall financial condition, Telisky said it cannot afford to take on much debt to fix the system.